With many sensing we are in the final stretch of record low interest rates, some firms on Wall Street are expecting the fortunes for the top homebuilders to start picking up again. A new report from UBS handicaps earnings estimates for the companies they cover, and it also projects that the housing recovery may be poised to pick up steam again.

The UBS team points out that so far this year the homebuilders as a group are up 9%, compared to the 2% gain of the S&P 500. They also see the next stage of the homebuilding recovery starting to kick in and expect it to last through 2017. Four stocks are rated Buy at UBS: Beazer Homes USA Inc. (NYSE: BZH), Hovnanian Enterprises Inc. (NYSE: HOV), PulteGroup Inc. (NYSE: PHM) and Ryland Group Inc. (NYSE: RYL).

Beazer Homes USA

Beazer has seen consistent insider buying over the past year, and it could be in position for a good earnings report. The company is one of the country’s 10 largest single-family homebuilders and sells and builds in 16 states: Arizona, California, Delaware, Florida, Georgia, Indiana, Maryland, Nevada, New Jersey, New York, North Carolina, Pennsylvania, South Carolina, Tennessee, Texas and Virginia.

While Beazer is not scheduled to report until the end of the month, the stock has bounced nicely off a February low and has trended higher ever since. The company has a high exposure to first-time homebuyers, and the chatter over increasing rates is hustling many to buy now.

The UBS price target for the stock is a whopping $28. The Thomson/First Call consensus target is $22. Shares closed Monday at $18.14.

ALSO READ: 5 IT Hardware Tech Stocks to Buy Before Earnings

Hovnanian Enterprises

This builder designs, constructs, markets and sells residential homes in the United States. It constructs single-family detached homes, attached townhomes and condominiums, urban infill and active adult homes. The company markets its build homes for first-time buyers, first-time and second-time move-up buyers, luxury buyers, active adult buyers and empty nesters in 201 communities in 34 markets. It also provides financial services consisting of originating mortgages from homebuyers and selling such mortgages in the secondary market, as well as offers title insurance services.

This could be a company for aggressive accounts that want to take a big homebuilder shot. The stock has struggled somewhat compared to the other top names in the industry. The low price allows traders to take a much more substantial position.

The UBS price target is set at $5, well above the consensus target of $3.92. The stock closed Monday at $3.41 per share.

PulteGroup

PulteGroup ranks as one of America’s largest homebuilding companies, with operations in approximately 50 markets throughout the country. Through its brand portfolio includes Centex, Pulte Homes, Del Webb and DiVosta Homes, Pulte has become one of the industry’s most versatile homebuilders, able to meet the needs of multiple buyer groups.

ALSO READ: 4 Stocks That Get a Boost From Solar Installations in China

The stock remains the top pick at UBS and is also on the prestigious Key Call list at the firm. The company could be poised for a very strong second half of 2015, and the continued share purchase plan could provide support. Selling trends are a key, and the UBS team will be closely monitoring management direction.

Pulte investors are paid a 1.4% dividend. The UBS price target is $25, and the consensus target is $23.03. The stock closed Monday at $21.90. The company reports earnings Thursday before the open.

Ryland Group

This homebuilder and mortgage-finance company has six operating business segments: four in geographically determined homebuilding regions, as well as financial services and corporate. Pent up demand from young adults is one of the key reasons to own the stock. Its price points are designed to attract the first- and second-time buyer, and that is a large segment coming in to the current market.

The UBS team likes the earnings growth potential for the company, and substantial community count growth is expected as the company absorbs acquisitions made over the past few years.

Ryland investors are paid a tiny 0.2% dividend. The UBS price objective is $50, and the consensus estimate is $44.35, which is below where shares closed most recently, at $46.88.

ALSO READ: A Pair of Social Media Stocks That May Post Blow-Out Earnings

The big money that was made in the homebuilding stocks after the housing collapse and the Great Recession is over. Investors looking for solid portfolio additions in what has become a pricey market may want to look at these top names to buy. They could bring good gains for the rest of the year, and they lack the downside in some of the stocks that have traded ahead of themselves, especially with the potential for growth for the industry into 2017.

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.